Basics of the U.S. Health Care System Third Edition

Nancy J. Niles, MPH, MS, MBA, PhD Associate Professor, Rollins College, Winter Park, Florida

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Library of Congress Cataloging-in-Publication Data Names: Niles, Nancy J., author. Title: Basics of the U.S. health care system / Nancy Niles. Description: Third edition. | Burlington, MA : Jones & Bartlett Learning, [2018] | Includes bibliographical references and index. Identifiers: LCCN 2016045762 | ISBN 9781284103007 (pbk.) Subjects: | MESH: Delivery of Health Care | Insurance, Health | National Health Programs | United States Classification: LCC RA445 | NLM W 84 AA1 | DDC 362.1--dc23 LC record available at https://lccn.loc.gov/2016045762

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9781284103007_FMxx_Pass01.indd 2 10/17/16 6:43 PM : © Stephen Mahar/ShutterStock, Inc.; Monitor: © Getty Images; Medical Form: Shutterstock / Pixsooz Brief Contents

About the Author viii Acknowledgments ix Preface x

Chapter 1 History of the U.S. Healthcare System...... 1 Chapter 2 Impact of the Affordable Care Act on Healthcare Services ...... 29 Chapter 3 Current Operations of the Healthcare System...... 57 Chapter 4 Government’s Role in U.S. Health Care...... 91 Chapter 5 ’s Role in Health Care...... 114 Chapter 6 Inpatient and Outpatient Services...... 146 Chapter 7 U. S. Healthcare Workforce ...... 173 Chapter 8 Healthcare Financing...... 200 Chapter 9 Managed Care Impact on Healthcare Delivery...... 229 Chapter 10 Information Technology Impact on Health Care...... 251 Chapter 11 Healthcare Law...... 277 Chapter 12 Healthcare Ethics ...... 308 Chapter 13 Mental Health Issues...... 338 Chapter 14 Analysis of the U.S. Healthcare System...... 367

Glossary 000 Index 000

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About the Author...... viii Stakeholders’ Environment...... 62 Acknowledgments...... ix Healthcare Statistics...... 62 Preface...... x Conclusion...... 77 Vocabulary...... 78 Chapter 1 History of the U .S . Healthcare References ...... 78 System ...... 1 Notes...... 79 Introduction...... 2 Student Activities...... 80 Consumer Perspective on Health Care...... 3 Chapter 4 Government’s Role in U .S . Health Milestones of the Hospital System...... 8 Care...... 91 Milestones of Public Health...... 9 Introduction...... 92 Milestones of the Health Insurance System ...... 10 History of the Role of Government in Current System Operations...... 12 Health Care...... 92 Assessing Your Healthcare System Using the Iron U .S . Government Agencies...... 92 Triangle...... 13 Conclusion...... 99 Conclusion...... 13 Vocabulary...... 99 Vocabulary...... 14 References ...... 100 References ...... 14 Notes...... 101 Notes...... 16 Student Activities...... 102 Student Activities...... 17 Chapter 5 Public Health’s Role in Chapter 2 Impact of the Affordable Care Act Health Care ...... 114 on Healthcare Services...... 29 Introduction...... 115 Introduction...... 30 What Is Health?...... 115 Legal Issues with the Affordable Care Act...... 30 Origins of Public Health...... 117 Major Provisions of the Affordable Care Act...... 31 What Is Public Health?...... 117 Conclusion...... 40 The Epidemiology Triangle...... 118 Vocabulary...... 41 Epidemiologic Surveillance...... 118 References ...... 42 Environmental Health ...... 119 Notes...... 44 Emergency Preparedness...... 119 Student Activities...... 45 State and Local Response to Disasters...... 121 Chapter 3 Current Operations of the Bioterrorism...... 122 Healthcare System...... 57 Public Health Functions and Administration. . . . 123 Introduction...... 58 Healthy People Reports...... 124 Overview of the Current System Update...... 58 Public Health Infrastructure...... 124 Major Stakeholders in the Healthcare Industry. . . . .58 Public Health Education and Health Promotion. . . 128

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Collaboration of Public Health and Notes...... 187 Private ...... 129 Student Activities...... 188 Conclusion...... 129 Vocabulary...... 130 Chapter 8 Healthcare Financing...... 200 References ...... 131 Introduction...... 200 Notes...... 133 Healthcare Spending by Service Type...... 201 Student Activities...... 134 Healthcare Spending by Sources of Funds. . . . . 202 Health Insurance as a Payer for Healthcare Chapter 6 Inpatient and Outpatient Services...... 202 Services...... 146 Types of Health Insurance ...... 203 Introduction...... 147 Cost Sharing of Health Services...... 203 History of ...... 147 Types of Health Insurance Plans...... 204 Hospital Types by Ownership...... 148 Public Financing of Healthcare Services...... 206 Hospital Types by Specialty...... 148 Reimbursement Methods of Private Health Other Hospital Classifications...... 148 Insurance Plans...... 209 Hospital Governance...... 149 Governmental Reimbursement Methods for Healthcare Services...... 210 Hospital Licensure, Certification, and Accreditation...... 150 Healthcare Financial Management...... 213 Rights...... 150 Funds Disbursement...... 213 Current Status of Hospitals...... 150 Conclusion...... 213 Outpatient Services...... 152 Vocabulary...... 214 Other Health Services...... 154 References ...... 214 Conclusion...... 157 Notes...... 216 Vocabulary...... 157 Student Activities...... 217 References ...... 158 Chapter 9 Managed Care Impact on Notes...... 160 Healthcare Delivery ...... 229 Student Activities...... 161 Introduction...... 230 Chapter 7 U .S . Healthcare Workforce. . . . . 173 History of Managed Care...... 230 Introduction...... 173 The Managed Care Organization Payment Plan...... 232 Primary, Secondary, and Tertiary Care...... 174 Cost-Control Measures of Managed Care Education...... 174 Organizations...... 232 Generalists and Specialists...... 175 Medicare and Medicaid Managed Care...... 233 Differences Between Primary and Assessment of Managed Care Models...... 234 Specialty Care...... 175 Managed Care Accreditation...... 235 Types of Healthcare Providers...... 176 Issues with Managed Care Operations...... 235 Other Independent Healthcare Professionals ...... 178 Challenges to Managed Care...... 235 Allied Health Professionals...... 180 Conclusion...... 236 Non-CAAHEP Allied Health Professionals...... 183 Vocabulary...... 236 Conclusion...... 184 References ...... 237 Vocabulary...... 185 Notes...... 238 References ...... 185 Student Activities...... 239

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Chapter 10 Information Technology Chapter 12 Healthcare Ethics ...... 308 Impact on Health Care...... 251 Introduction...... 309 Introduction...... 252 Healthcare Stakeholder Management Model. . . 309 History of Information Technology in the Basic Concepts of Ethics in the Healthcare Healthcare Industry...... 252 Workplace...... 310 Electronic Health Records...... 253 Healthcare Codes of Ethics...... 310 Barriers to Electronic Health Record Workplace Bullying...... 311 Implementation...... 254 Ethics and the Doctor–Patient Relationship. . . . . 312 Clinical Decision Support Systems...... 255 Physician–Patient Relationship Model...... 313 Benefit Managers...... 256 Pharmaceutical Marketing to ...... 314 Drug–Drug Interactions ...... 256 Decision Model for Healthcare Dilemmas...... 314 Telehealth...... 257 Ethics and Public Health...... 315 Avera Ecare...... 257 Ethics and Research ...... 316 Million Hearts...... 257 Bioethical Issues...... 317 Chief Information Officer...... 258 Conclusion...... 321 Council for Affordable Quality Vocabulary...... 322 Health Care...... 258 References ...... 322 Other Applications ...... 258 Notes...... 325 Applied Health Information Technology ...... 259 Student Activities...... 326 The Importance of Health Information Technology...... 260 Chapter 13 Mental Health Issues...... 338 Conclusion...... 261 Introduction...... 339 Vocabulary...... 261 History of U .S . Mental Health Care...... 339 References ...... 261 Background of Mental Health Services...... 340 Notes...... 264 Family and Caregivers ...... 343 Student Activities...... 265 Special Populations...... 343 Chapter 11 Healthcare Law...... 277 Mental Health and Culture, Race, and Ethnicity. . . 345 Mental Health Issues and Disasters, Trauma, Introduction...... 278 and Loss...... 346 Basic Concepts of Healthcare Law ...... 278 Mental Health and Veterans...... 347 Tort Reform...... 278 Managed Behavioral Health Care ...... 347 The Legal Relationship between the Provider National Institute for Mental Health Strategic and Consumer ...... 279 Plan...... 348 Healthcare-Related Legislation...... 280 The Virginia Tech Massacre: A Case Study of the Patient Bill of Rights...... 282 Mental Health System...... 348 Healthcare Fraud...... 283 Alternative Approaches to Mental Health Care. . . 349 Employment-Related Legislation...... 285 American with Disabilities Act of 1990 and Other Employment-Related Legislation...... 289 Mental Health...... 350 Conclusion...... 292 Conclusion...... 350 Vocabulary...... 292 Vocabulary...... 351 References ...... 293 References ...... 351 Notes...... 295 Notes...... 353 Student Activities...... 296 Student Activities...... 354

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Chapter 14 Analysis of the U .S . Healthcare International Healthcare Systems...... 377 System ...... 367 Universal Healthcare Concepts...... 378 Local Government Healthcare Reform...... 380 Introduction...... 368 Lessons to Be Learned from Other Healthcare Highlights of the U .S . Healthcare System...... 368 Systems...... 381 Affordable Care Act Impact...... 368 Conclusion...... 382 Government’s Role...... 369 Vocabulary...... 382 Public Health...... 369 References ...... 383 Hospital and Outpatient Services...... 370 Notes...... 385 Information Technology...... 371 Student Activities...... 386 Healthcare Law...... 371 Healthcare Ethics...... 372 Glossary...... 000 Mental Health...... 373 Trends in Health Care...... 373 Index...... 000

9781284103007_FMxx_Pass01.indd 7 10/17/16 6:44 PM Hospital: © Stephen Mahar/ShutterStock, Inc.; Monitor: © Getty Images; Medical Form: Shutterstock / Pixsooz About the Author

Nancy J. Niles, PhD, MS, MBA, MPH, is in her 12th community assessment and development, obtaining year of full-time undergraduate teaching. She is in her funding for business- and health-related projects. Her second year of teaching undergraduate and graduate professional experience also includes directing the healthcare management and administration courses New York State lead poisoning prevention program at Rollins College in Winter Park, Florida. Prior to and managing a small business development center in Rollins College, she taught 8 years of undergraduate Myrtle Beach, South Carolina. business and healthcare management classes in the Her graduate education has focused on health pol- AACSB-accredited School of Management at Lander icy and management. She received a master of public University in Greenwood, South Carolina, having health from the Tulane School of Public Health in New spent 4 years teaching in the Department of Business Orleans, Louisiana, a master of management with a Administration at Concord University in Athens, healthcare administration emphasis, and a master of West Virginia. She became very interested in health business administration from the University of Mary- issues as a result of spending two tours with the U.S. land University College, and a doctorate from the Uni- Peace Corps in Senegal, West Africa. She focused on versity of Illinois at Urbana, Champaign in health policy.

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My mother, Joyce Robinson, continues to amaze me I would like to thank my husband, Donnie Niles, with her energy and I applaud her for her import- the love of my life, for his continued love and support. ant work as a guardian ad litem for children in South I would also like to thank Mike Brown at Jones & Carolina. They are lucky to have her. I would also like ­Bartlett Learning, who provided me with this oppor- to mention my childhood friends, Victoria Haskins tunity to write my first textbook and now the third McLaughlin, Maria Barrington Hummel, Shelley edition to my first effort. Danielle Bessette and ­Carmel ­Teahan, and Susan Kalafut. Although I don’t see them Isaac who have been wonderful. I so appreciate their as much as I would like, I have wonderful memories of input into my projects. our adventures together in Albany, New York.

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am very pleased to be updating this textbook be- decisions about what matters most—your health. The cause of the continued changes in the U.S. health- federal government agrees with this philosophy. The care system as a result of the passage of the Afford- Affordable Care Act’s health insurance marketplaces Iable Care Act (ACA) in 2010. Fortunately, millions of provide cost and service data so consumers can deter- individuals now have healthcare insurance as a result mine what is the best healthcare insurance to purchase of the Act. Although the Act continues to be contro- and what services they will be receiving for that pur- versial, the Act has focused our healthcare delivery chase. Recently, the Centers for Medicare and Medic- on patient centeredness and performance based out- aid Services (CMS) used its claim data to publish the comes which has improved the delivery of U.S. health- hospital costs of the 100 most common treatments care services. Preventable medical errors continue to nationwide. The purpose of this effort is to provide be a problem but healthcare facilities are developing data to consumers regarding healthcare costs because strategies to reduce these preventable errors. the costs vary considerably across the United States. I continue to review and update the student activi- This effort may also encourage pricing competition ties. I also included a section on a current events exer- of healthcare services. The U.S. Department of Health cise. My students enjoy this type of exercise because and Human Services is providing funding to states to they can apply the textbook information to a current increase their healthcare pricing transparency healthcare event. The following is a summary of each As the U.S. population’s life expectancy con- chapter. tinues to lengthen—increasing the “graying” of the ­population—the United States will be confronted with more chronic health issues because, as we age, more ▸▸ Chapter 1 chronic health conditions develop. The U.S. health- care system is one of the most expensive systems in the It is important as a healthcare consumer to understand world. According to 2014 statistics, the United States the history of the U.S. healthcare delivery system, how spent $2.9 trillion or $9,255 per person on healthcare it operates today, who participates in the system, what expenditures or 17.5% of its gross domestic prod- legal and ethical issues arise as a result of the system, uct. The gross domestic product (GDP) is the total and what problems continue to plague the healthcare finished products or services that are produced in a system. We are all consumers of health care. Yet, in country within a year. These statistics mean that over many instances, we are ignorant of what we are actu- 17% of all of the products made within the borders of ally purchasing. If we were going to spend $1,000 on the United States within a year are healthcare related. an appliance or a flat-screen television, many of us Estimates indicate that healthcare spending will be would research the product to determine if what we 19.3% of the gross domestic product. The Gallup-­ are purchasing is the best product for us. This same Healthways Well-Being Index indicate that in 2014, the concept should be applied to purchasing healthcare number of uninsured Americans has dropped to 16%. services. Among the states, Hawaii had the lowest percentage Increasing healthcare consumer awareness will of uninsured individuals under age 65 in 2014 (2.5%), protect you in both the personal and professional followed by Massachusetts (3.2%), Delaware (5.4%), aspects of your life. You may decide to pursue a career and Iowa (6.4%). The District of Columbia also had a in health care either as a provider or as an administra- low insurance rate of 3.3%. Texas (21.5%), Oklahoma tor. You may also decide to manage a business where (21.5%), Alaska (21.2%), and Florida (18.8%) had the you will have the responsibility of providing health highest percentage of uninsured individuals under care to your employees. And last, from a personal age 65 in 2014. The rates of uninsured individuals standpoint, you should have the knowledge from a have dropped most among lower-income and black consumer point of view so you can make informed Americans. These drops have been attributed to the

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insurance mandate of the Affordable Care Act. The the cost increases. Because the United States does Institute of Medicine’s (IOM) 1999 report indicated not have universal health coverage, there are more that nearly 100,000 citizens die each year as a result health disparities across the nation. Persons living in of medical errors. There have been more recent stud- poverty are more likely to be in poor health and less ies that indicate this estimate is much higher despite likely to use the healthcare system compared to those many quality improvement initiatives implemented with incomes above the poverty line. If the United over the years. States offered universal health coverage, the per cap- Although U.S. healthcare costs are very high, the ita expenditures would be more evenly distributed United States does not offer healthcare coverage as a and likely more effective. The major problem for the right of citizenship. The U.S. is the only major country United States is that healthcare insurance is a major that does not offer healthcare as a right. Most devel- determinant of access to health care. Although there oped countries have a universal healthcare program, has been a decrease in the number of uninsured in the which means access to all citizens. Many of these United States as a result of the individual mandate to systems are typically run by the federal government, purchase health insurance by the Affordable Care Act, have centralized health policy agencies, are financed there is still limited access to routine health care statis- through different forms of taxation, and payment of tics. The infant mortality rate is often used to compare healthcare services are by a single payer—the gov- the health status of nations worldwide. Although our ernment. and the United Kingdom have been healthcare expenditures are very high, our infant mor- discussed as possible models for the United States tality rates rank higher than many countries. Racial to follow to improve access to health care, but these disparities in and death rates continue to be a programs have problems and may not be the ultimate concern. However, there has been a decline of 13% in solution for the United States. However, because the infant mortality rates in the U.S. from 2000 to 2013. United States does not offer any type of universal If you compare this statistic worldwide to comparable healthcare coverage, many citizens who are not eligi- countries, their rates dropped during the same time ble for government-sponsored programs are expected period by 26%. The U.S. has more work to do regard- to provide the service for themselves through the pur- ing this issue. Both private and public participants in chase of health insurance or the purchase of actual the U.S. health delivery system need to increase their services. Many citizens cannot afford these options, collaboration to reduce these disease rates. Leaders resulting in their not receiving routine medical care. need to continue to assess our healthcare system using The Patient Protection and Affordable Care Act of the Iron Triangle to ensure there is a balance between 2010 (PPACA), more commonly called the Affordable access, cost, and quality. Care Act, has attempted to increase access to afford- able healthcare. One of the mandates of the Act was the establishment of electronic health insurance mar- ▸▸ Chapter 2 ketplaces, which provide opportunities for consumers to search for affordable health insurance plans. There The Patient Protection and Affordable Care Act is also a mandate that individuals who do not have (PPACA) or as it is commonly called, the Affordable health insurance purchase health insurance if they can Care Act (ACA), and its amendment, the Health- afford it or pay a fine. Both of these mandates have care and Education Affordability Reconciliation Act decreased the number of uninsured in the United of 2010, was signed into law on March 23, 2010, by States. President Barack Obama. The passage of this complex Despite U.S. healthcare expenditures, disease landmark legislation has been very controversial and rates in the United States remain higher than those of continues to be contentious today. many other developed countries because the United There were national public protests and a huge States has an expensive system that is available to division among the political parties regarding the only those who can afford it. Findings from a recent components of the legislation. People, in general, MetLife annual survey indicate that healthcare costs agreed that the healthcare system needed some type are worrying employees and their employers. Over of reform, but it was difficult to develop common rec- 60% of employees are worried they will not be able ommendations that had majority support. Criticism to pay out-of- pocket expenses not covered by insur- focused in part on the increased role of government in ance. Employers are increasing the cost sharing of implementing and monitoring the healthcare system. their employees for healthcare benefits because of Proponents of healthcare reform reminded people

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that Medicare is a federal-government entitlement There are five areas of health care that account for a program because when individuals reach 65 years large percentage of healthcare costs: hospital care, of age, they can receive their health insurance from physician and clinician services, prescription drugs, this program. Millions of individuals are enrolled in , and home healthcare expenditures. The leg- Medicare. Medicaid is a state-established governmen- islation targets these areas by increasing quality assur- tal public welfare insurance program based on income ance and providing a system of reimbursement tied to for millions of individuals, including children that quality performance, providing accessibility to con- provides health care for its enrollees. sumers regarding the quality of their health care, and However, regardless of these two programs, many increasing access to community health services. Also, critics felt that the federal government was forcing the Affordable Care Act has focused on improving the people to purchase health insurance. In fact, the ACA U.S. public health system by increasing the accessibil- does require most individuals to obtain health insur- ity to primary prevention services such as screenings ance only if they can afford it. But with healthcare sys- and wellness visits at no cost. The ACA has mandated tem expenditures comprising 17.9% of the U.S. gross that healthcare providers make available certain ser- domestic product and with millions of Americans not vices with no cost sharing to the healthcare consumer: having access to health care, resulting in poor health 15 preventive services for adults, 22 preventive ser- indicators, the current administration’s priority was to vices for women, 25 preventive services for children, create mandated healthcare reform. and 23 preventive services for Medicare enrollees. The Affordable Care Act has focused on primary Revenue provisions are in place to offset some of the care as the foundation for the U.S. healthcare system. costs of this legislation. With continued controversy, it The legislation has focused on 10 areas to improve the will be difficult to quickly assess the cost effectiveness U.S. healthcare system, including quality, affordable, and impact of this health reform on improving the and efficient healthcare; public health and primary health care of U.S. citizens. The President had to veto prevention of disease; healthcare workforce increases; a repeal of the bill and the House of Representatives community health; and increasing revenue provi- have a Task Force to craft an improved ACA. The next sions to pay for the reform. However, once the bill was major issue is whether typical middle class Americans signed, several states filed lawsuits. Several of these can afford the high deductibles and increased cost lawsuits argued that the act violates the U.S. Constitu- sharing for their healthcare. tion because of the mandate of individual healthcare insurance coverage as well as that it infringes on states’ rights with the expansion of Medicaid. The 2012 U.S. ▸▸ Chapter 3 Supreme Court decision that upheld the constitution- ality of the individual mandates should decrease the The one commonality with all of the world’s health- number of lawsuits. Despite these lawsuits, this legis- care systems is that they all have consumers or users lation has clearly provided opportunities to increase of their systems. Systems were developed to provide a consumer empowerment of the healthcare system service to their citizens. However, the U.S. healthcare by establishing the state American Health Benefit system, unlike other systems in the world, does not Exchanges, providing insurance to those individuals provide healthcare access to all of its citizens. It is a with preexisting conditions, eliminating lifetime and very complex system that is comprised of many pub- annual caps on health insurance payouts, improving lic and private components. Healthcare expenditures the healthcare workforce, and providing databases so comprise approximately 17.5% of the gross domestic consumers can check the quality of their health care. product (GDP). Health care is very expensive and The 10 titles of this comprehensive legislation are also most citizens do not have the money to pay for health focused on increasing the role of public health and pri- care themselves. Individuals rely on health insurance mary care in the U.S. healthcare system and increas- to pay a large portion of their healthcare costs. Health ing accessibility to the system by providing affordable insurance is predominantly offered by employers. The health care. uninsured rate remains at an all-time low with 9.1% of Although this legislation continues to be contro- under 65 uninsured as of the end of 2015 according to versial, a system-wide effort needed to be implemented CDC.Gov data. Generally, 2016 saw a rough increase to curb rising healthcare costs although there have of all the 2015 numbers. The government believes this been reports that healthcare costs are increasing and is the result of the universal mandate for individual consumers are paying higher cost sharing amounts. health insurance coverage.

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In the United States, in order to provide healthcare ▸▸ services, there are several stakeholders or interested Chapter 4 entities that participate in the industry. There are pro- During the Depression and World War II the United viders, of course, that consist of trained professionals States had no funds to start a universal healthcare such as physicians, nurses, dentists, and chiropractors. ­program—an issue that had been discussed for years. There are also inpatient and outpatient facilities; the As a result, a private-sector system was developed payers such as the insurance companies, the govern- that did not provide healthcare services to all citizens. ment, and self-pay individuals; and the suppliers of However, the government’s role in providing health- products, such as pharmaceutical companies, medical care coverage evolved to being a regulatory body to equipment companies, and research and educational ensure that the elderly and poor were able to receive facilities. Each component plays an integral role in the health care. The passage of the Social Security Act healthcare industry. These different components fur- of 1935 and the establishment of the Medicaid and ther emphasize the complexity of the U.S. system. It is Medicare programs in 1965 mandated the govern- projected that between 2014 and 2024, nearly 10 mil- ment’s increased role in providing healthcare cov- lion jobs will be added in the U.S. healthcare industry. erage. Also, the State Children’s Health Insurance The United States spends the highest proportion of its Program (SCHIP), now the Children’s Health Insur- GDP on healthcare expenditures. The system is a com- ance Program, established in 1997 and reauthorized bination of private and public resources. Since World by the Affordable Care Act (ACA) through 2019, con- War II, the United States has had a private fee-for- tinues to expand the government’s role in children’s service system that has produced generous incomes health care. The laws require states, upon enactment, for physicians and has been profitable for many par- to maintain current income eligibility levels for CHIP ticipants in the healthcare industry. The healthcare through September 30, 2019. In addition to the reau- industry operates like traditional business industries. thorization of the CHIP program, the ACA increased Organizations designated as for profit need to make governmental interaction with the healthcare system money in order to operate. The main goal of entities by developing several of the governmental initiatives that are designated nonprofit is based on a particular that focus on increasing the ability of individuals to social goal, but they also have to make money in order make informed decisions about their health care. to continue their operations. In these instances, the government increased There are several major stakeholders that partic- accessibility to health care as well as provided financ- ipate or have an interest in the industry. The stake- ing for health care to certain targeted populations. The holders identified as participants in the healthcare government plays an important role in the quality of industry include consumers, employers, healthcare the U.S. healthcare system. The federal government and non-healthcare employers, healthcare providers, provides funding for state and local governmental healthcare facilities, governments (federal, state, and programs. Federal healthcare regulations are imple- local), insurance companies, educational and training mented and enforced at the state and local levels. institutions, professional associations that represent Funding is primarily distributed from the federal gov- the different stakeholders, pharmaceutical companies, ernment to the state government, which then allocates and research institutions. It is also important to men- funding to local health departments. Local health tion the increasing prominence of alternative departments provide the majority of services for their medicine. Each role will be discussed briefly in this constituents. More local health departments are work- chapter. ing with local organizations such as schools and physi- It is important to assess the system from an inter- cians to increase their ability to provide education and national perspective. Comparing different statistics prevention services. from the OECD is valuable to assess the health of the The DHS and FEMA now play an integral role United States. Despite the amount of money spent in the management and oversight of catastrophic on health care in the United States, the United States events, such as natural disasters, earthquakes, floods, ranked lower on many measures than other countries , and bioterrorism. The DHS and that spend less on their healthcare systems. These FEMA collaborate closely with the CDC to ensure that statistics may point to the fact that other countries’ both the state and local health departments have a cri- healthcare systems are more effective than the U.S. sis management plan in place for these events. These system or that their citizens have healthier lifestyles, attacks are often horrific and frightening with a tre- although obesity rates are increasing globally. mendous loss of life, and as a result, the state and local

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health departments need to be more prepared to deal to prevent health issues from occurring. The defini- with catastrophic events. They are required to develop tions cited in the previous paragraph emphasize this plans and be trained to deal effectively with many of viewpoint. Public health concepts were in stark con- these catastrophic issues. Finally, the Affordable Care trast to , which focused on the Act has increased government involvement in the relationship between a provider and patient. Private healthcare industry to promote access to a quality practitioners held an individualistic viewpoint—­ healthcare system. This chapter will focus on the dif- people more often would be paying for their ser- ferent roles the federal, state, and local governments vices from their health insurance or from their own play in the U.S. healthcare system. This chapter will pockets. Physicians would be providing their also highlight different governmental programs and guidance on how to cure their diseases, not prevent- regulations that focus on monitoring how health care ing disease. As a healthcare consumer, it is important is provided. to recognize the role that public health plays in our health care. If you are sick, you go to your physician for medical advice, which may mean receiving a pre- ▸▸ Chapter 5 scription. However, there are often times that you may not go see your physician because you do not have There are two important definitions of public health. health insurance or you do not feel that sick or you In 1920, public health was defined by Charles Winslow would like to change one of your lifestyle behaviors. as the science and art of preventing disease, prolong- Public health surrounds consumers with educational ing life, and promoting physical health and efficiency opportunities to change a health condition or behav- through organized community efforts for the sanita- ior. You can visit the CDC’s website, which provides tion of the environment, control of community infec- information about different diseases and health con- tions, and education of individuals regarding hygiene ditions. You can also visit your local health depart- to ensure a standard of living for health maintenance. ment. CDC has become very proactive in developing Sixty years later, the Institute of Medicine (IOM), in successful social media campaigns regarding public its 1988 Future of Public Health report, defined public health issues. Traditional medicine has also become health as an organized community effort to address entrenched in social media as well. These tools are public health by applying scientific and technical an effective way to communicate with a society that knowledge to promote health. Both definitions point to is so connected with social media applications on a broad community efforts to promote health activities daily basis. to protect the population’s health status. The Afford- The concept of public health has been more publi- able Care Act is also emphasizing the importance of cized in the 21st century because of the terrorist attacks prevention and wellness. The establishment of the Pre- of 2001, the anthrax attacks in post offices, the natural vention and Public Health Fund has supported several disasters of Hurricane Katrina and Super storm Sandy, community-based public health programs. To date, the the Boston Marathon bombing, the Ebola and Zika Fund has invested in a broad range of ­evidence-based virus epidemics and flooding in the Midwest. Fund- activities including community and clinical prevention ing has increased for public health activities because initiatives; research, surveillance, and tracking; public of these events. The concept of bioterrorism is now health infrastructure; immunizations and screenings; a reality. Because public health is now considered an tobacco prevention; and public health workforce and integral component to battling terrorism and conse- training. As of 2016, funding has been allocated to quently a matter of national security, federal funding public health priorities including Alzh­ eimer’s disease dramatically increased. This chapter will discuss the prevention, chronic disease self-management, diabe- concept of health and healthcare delivery and the role tes prevention, hospital promotion of breastfeeding, of public health in delivering health care. The concepts and lead poisoning prevention. of primary, secondary, and tertiary prevention and the The development of public health is important to role of public health in those delivery activities will be note as part of the basics of the U.S. healthcare system highlighted. Discussion will also focus on the origins because its development was separate from the devel- of public health, the major role epidemiology plays opment of private medical practices. Public health in public health, the role of public health in disasters, specialists view health from a collectivist and preven- core public health activities, the collaboration of pub- tative care viewpoint: to protect as many citizens as lic health and private medicine, and the importance of possible from health issues and to provide strategies public health consumers.

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▸▸ in technology. The implementation of patient elec- Chapter 6 tronic health record systems nationwide will be the Inpatient services are services that involve an over- impetus for the development of more electronic night stay of a patient. Historically, the U.S. health- healthcare services. This chapter will discuss the evo- care industry was based on the provision of inpatient lution of outpatient and inpatient healthcare services services provided by hospitals and outpatient services in the United States. provided by physicians. As our healthcare system evolved, hospitals became the mainstay of the health- care system, offering primarily inpatient with limited ▸▸ Chapter 7 outpatient services. Over the past two centuries, hos- pitals have evolved from serving the poor and home- The healthcare industry is the fastest growing industry less to providing the latest medical technology to serve in the U.S. economy, employing a workforce of nearly the seriously ill and injured. Although their original 20 million healthcare workers. Considering the aging focus was inpatient services, as a result of cost con- of the U.S. population and the impact of the Affordable tainment and consumer preferences, more outpatient Care Act, it is expected that the healthcare industry will services are now being offered by hospitals. Hospitals continue to experience strong job growth. Job growth have evolved into medical centers that provide the in many healthcare sectors is outpacing that in other most advanced service. Hospitals can be classified by industries. When we think of healthcare providers, we who owns them, length of stay, and type of services automatically think of physicians and nurses. How- provided. Inpatient services typically focus on acute ever, the healthcare industry is composed of many dif- care, which includes secondary and tertiary care lev- ferent health service professionals, including dentists, els that most likely require inpatient care. Inpatient optometrists, psychologists, chiropractors, podiatrists, care is very expensive and, throughout the years, has nonphysician practitioners (NPPs), administrators, been targeted for cost-containment measures. Hospi- and allied health professionals. It is important to iden- tals have begun offering more outpatient services that tify allied health professionals because they provide a do not require an overnight stay and are less finan- range of essential healthcare services that complement cially taxing on the healthcare system. U.S. health- the services provided by physicians and nurses. This care expenditures have increased as part of the gross category of health professionals is an integral compo- domestic product, and consequently, more cost-con- nent of providing quality health. tainment measures have evolved. Outpatient services Health care can occur in varied settings. Physi- have become more prevalent because they are less cians have traditionally operated in their own prac- expensive and they are preferred by consumers. tices but they also work in hospitals, mental health Although hospitals admit 35 million individuals facilities, managed care organizations, and community annually, the healthcare industry has recognized that health centers. They may also hold government posi- outpatient services are a cost-effective method of pro- tions or teach at a university. They could be employed viding quality health care and has therefore evolved by an insurance company. Health professionals, in into providing quality outpatient care. This type of general, may work at many different organizations, service is the preferred method of receiving health both for profit and nonprofit. Although the healthcare care by the consumer. In 2015, there were over 900 mil- industry is one of the largest employers in the United lion visits to doctor’s offices, which is the traditional States, there continue to be shortages of physicians in method of ambulatory care. However, as medicine has certain geographic areas of the country. Rural areas evolved and more procedures, such as , can continue to suffer physician shortages, which lim- be performed on an outpatient basis, different types of its consumer access to health care. There have been outpatient care have evolved. As discussed previously, different incentive programs to encourage physicians there are more outpatient surgical centers, imaging to relocate to rural areas, but shortages still exist. In centers, urgent and emergent care centers, and other most states, only physicians, dentists, and a few other services that used to be offered on an inpatient basis. practitioners may serve patients directly without the There will continue to be an increase in outpatient authorization of another licensed independent health services being offered. Technology will increase the professional. Those categories authorized include chi- quality and efficiency of health care for consumers. ropractic, optometry, psychotherapy, and . Telemedicine will also become a more widely used Some states authorize midwifery and physical ther- model for health care because of continued advances apy. There also continues to be a shortage of registered

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nurses nationwide, with the most need identified in insurance plans, such as indemnity plans or managed the south and west. There is also a shortage of quali- care organizations; (3) public or governmental funding fied nursing faculty to teach in nursing schools, which such as Medicare, Medicaid, and other governmental limits the number of students enrolled in registered programs; and (4) health savings accounts (HSAs). nursing programs. The American Association of Col- Much of the burden of healthcare expenditures has leges of Nursing (AACN) is discussing this issue with been borne by private sources—employers and their policy makers. health insurance programs. Individuals may continue Healthcare personnel comprise one of the largest to pay their health insurance premiums through the labor forces in the United States. This chapter provided Consolidated Omnibus Budget Reconciliation Act an overview of the different types of employees in the (COBRA) once they are unemployed, but most indi- healthcare industry. Some of them require many years viduals cannot afford to pay the expensive premiums. of education; however, some of these positions can be As a result of the passage of the Affordable Care attained upon completion of 1–2 year programs. The Act (ACA) of 2010, the government has played a pro- healthcare industry will continue to progress as U.S. active role in developing a healthcare system that is trends in demographics, disease, and public health more consumer oriented. The Act is requiring more pattern change, and cost and efficiency issues, insur- employers to offer health insurance benefits and ance issues, technological influences, and economic requiring individuals to purchase healthcare insur- factors continue to evolve. More occupations and pro- ance if they can afford it from the health insurance fessions will develop as a result of these trends. The marketplaces. The Act also requires health insurance major trend that will impact the healthcare industry is plans to provide more information about their plans the aging of the U.S. population. The BLS predicts that to their members so they can make informed deci- half of the next decades’ fastest growing job categories sions about their healthcare. will be in the healthcare industry. The Affordable Care To understand the complexity of the U.S. health- Act will continue to have an impact on the positive care system, this chapter will provide a breakdown growth for this industry. This chapter will provide a of U.S. healthcare spending by source of funds, and description of the different types of healthcare pro- the major private and public sources of funding for fessionals and their role in providing care in the U.S. these expenditures. It is important to reemphasize system that there are three parties involved in providing health care: the provider, the patient, and the fiscal intermediary such as a health insurance company ▸▸ Chapter 8 or the government. Therefore, also included in the chapter is a description of how healthcare provid- The percentage of the U.S. gross domestic prod- ers are reimbursed for their services and how reim- uct (GDP) devoted to healthcare expenditures has bursement rates were developed for both private and increased over the past several decades. In 2014, the public­ funds. United States spent $2.6 trillion on health care or 17.5% of the GDP, which is the highest percentage of its GDP in the world. The Centers for Medicare and ▸▸ Chapter 9 Medicaid Services (CMS) predicts annual healthcare costs will be $4.64 trillion by 2024, which represents Managed care is a healthcare delivery system orga- nearly 20% of the U.S. GDP. nized to manage cost, utilization, and quality. Man- As healthcare technology and research provide aged care refers to the cost management of healthcare for more sophisticated and more expensive proce- services by controlling who the consumer sees and dures, there will be an increase in healthcare expenses. how much the service costs. Managed care organi- Three areas account for over 60% of national health- zations (MCOs) were introduced 40 years ago, but care expenditures: hospital care, physician and clini- became more entrenched in the healthcare system cal services, and prescription drugs (Health spending when the Health Maintenance Organization Act of explorer, 2016). Unlike countries that have universal 1973 was signed into law by President Nixon. Health- healthcare systems, payment of healthcare services in care costs were spiraling out of control during that the United States is derived from (1) out-of-pocket period. Encouraging the increase in the development payments or cost sharing from patients who pay of HMOs, the first widely used managed care model, entirely or partially for services rendered; (2) health would help to control the healthcare costs. MCOs’

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integration of the financial industry with the medical data in different areas of health care. It is a method- service industry resulted in controlling the reimburse- ology of how the healthcare industry thinks about ment rate of services, which allowed MCOs more patients and how their treatments are defined and control over the health insurance portion of health evolved. For example, imaging informatics applies care. Physicians were initially resistant to managed computer technology to organs and tissue. Health care models because they were threatened by loss information systems are systems that store, trans- of income. As the number of managed care models mit, collect, and retrieve this data. The goal of health increased, physicians realized they had to accept this information technology (HIT) goal is to manage the new form of healthcare delivery and, if they partici- health data that can be used by patients–consumers, pated in a managed care organization, it was guaran- insurance companies, healthcare providers, health- teed income. Managed care health plans have become care administrators, and any stakeholder that has an a standard option for consumers. Medicare Part C ­interest in health care. which is commonly called Medicare Advantage offers HIT impacts every aspect of the healthcare indus- managed care options to their enrollees. Medicaid try. All of the stakeholders in the healthcare industry managed care provides for the delivery of Medicaid use HIT. Information technology (IT) has had a tre- health benefits and additional services through con- mendous impact on the healthcare industry because tracted arrangements between state Medicaid agencies it allows faster documentation of every transaction. and MCOs that accept a set payment per member per When an industry focuses on saving lives, it is import- month (capitation) for these services. Many employers ant that every activity has a written document that offer managed care plans to their employees. describes the activity. Computerization of documen- There also have been issues with how MCOs have tation has increased the management efficiency and reimbursed physicians. The issue with silent PPOs has accuracy of healthcare data. The main focus of HIT is financially hurt physicians. Physicians have also had the national implementation of an electronic patient problems with timely reimbursement from MCOs. record. Both President Bush and President Obama There were issues with fraudulent reimbursement have supported this initiative. rates of out-of-network services, which resulted in This is the foundation of many IT systems because members paying exorbitant out-of-pocket expenses. it will enable different systems to share patient infor- However, the American Medical Association has mation, which will increase the quality and efficiency developed tools to assist physicians with managed of health care. This chapter will discuss the history care contracting and reimbursement processes. The of IT, different applications of IT health care, and the Affordable Care Act mandate that insurance compa- status of electronic health records and barriers for its nies must spend 80–85% of their premium revenues on national implementation. quality care or be penalized with fines, give rebates to The healthcare industry has lagged behind their members, or both will be an incentive for MCOs other industries utilizing IT as a form of communi- to provide quality and affordable care. As healthcare cating important data. Despite that fact, there have continues to focus on providing quality care and cost been specific­ applications developed for HIT such reduction, having a database such as HEDIS can pro- as e-prescibing, telemedicine, ehealth, and spe- vide important information to both the healthcare cific applied technologies such as the PatientPoint, providers and consumers. This chapter will discuss ­MelaFind optical scanner, the Phreesia Pad, Sapien the evolution of managed care and why it developed, heart valve, robotic checkups, Electronic Aspirin, the different types of managed care, the MCO assess- Accuson P10, and the Piccolo xpress, which were dis- ment measures used for cost control, issues regarding cussed in this chapter. Healthcare organizations have managed care, and how managed care has impacted recognized the importance of IT and have hired CIOs the delivery of healthcare services. and CTOs to manage their data. However, healthcare consumers need to embrace an electronic patient record, which is the basis for the Microsoft Health ▸▸ Chapter 10 Vault. This will enable patients to be treated effectively and efficiently nationally. The patient health record The general term informatics refers to the science of can be integrated into the electronic health records computer application to data in different industries. that are being utilized nationwide. Having the ability Health or medical informatics is the science of com- to access a patient’s health information could assist puter application that supports clinical and research in reducing medical errors. As a consumer, utilizing

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a tool like HealthVault could provide an opportunity to Hippocrates, the father of medicine, in the 4th to consolidate all medical information electronically century BC, and evolved into the Hippocratic Oath, so, if there are any medical problems, the informa- which is the foundation for the ethical guidelines for tion will be readily available. The major IT issue in patient treatment by physicians. In 1847, the Ameri- healthcare is the need to establish the interoperability can Medical Association (AMA) published a Code of of EHRs systems nationwide. This communication Medical Ethics that provided guidelines for the phy- between systems will enable patients to be treated sician–provider relationship, emphasizing the duty more quickly because there will be immediate access to treat a patient. To this day, physicians’ actions to their most current medical information. Although have followed codes of ethics that demand the “duty the federal government has indicated this communi- t o t r e a t ”. cation between systems needs is necessary to ensure Applying the concept of ethics to the healthcare the full success of electronic health records system, industry has created two areas of ethics: medical ethics the progress continues to be slow. and bioethics. Medical ethics focuses on the decisions healthcare providers make concerning medical treat- ment of patients. Euthanasia or physician-assisted sui- ▸▸ Chapter 11 cide would be an example of a medical ethics topic. Advance directives are orders that patients give to The healthcare industry is one of the most heavily providers to ensure that, if they are terminally ill and regulated industries in the United States. Those who incompetent to make a decision, certain measures will provide, receive, pay for, and regulate healthcare ser- not be taken to prolong that patient’s life. If advance vices are affected by the law. To be an effective health- directives are not provided, the ethical decision of care manager, it is important to understand basic legal when to withdraw treatment may be placed on the and ethical principles that influence the work envi- family and provider. These issues are legally defined, ronment, including the legal relationship between although there are ethical ramifications surrounding the organization and the consumer—the healthcare these decisions. provider and the patient. The basic concepts of law, This chapter will focus primarily on bioethics. both civil and criminal healthcare law, tort reform, This field of study is concerned with the ethical impli- employment-related legislation, safety in the work- cations of certain biologic and medical procedures place, and the legal relationship between the provider and technologies, such as cloning; alternative repro- and the patient will be discussed in this chapter. I have ductive methods, such as in vitro fertilization; organ included some examples of LGBT-related claims that transplants; genetic engineering; and care of the termi- EEOC views as unlawful sex discrimination which I nally ill. Additionally, the rapid advances in medicine think is timely. in these areas raised questions about the influence of technology on the field of medicine. ▸▸ Chapter 12 It is important to understand the impact of ethics in different aspects of providing health care. Ethical Legal standards are the minimal standard of action dilemmas in health care are situations that test a pro- established for individuals in a society. Ethical stan- vider’s belief and what the provider should do profes- dards are considered one level above a legal action sionally. Ethical dilemmas are often a conflict between because individuals make a choice based on what is personal and professional ethics. A healthcare ethical the “right thing to do,” not what is required by law. dilemma is a problem, situation, or opportunity that There are many interpretations of the concept of eth- requires an individual, such as a healthcare provider, ics. Ethics has been interpreted as the moral founda- or an organization, such as a managed care practice, tion for standards of conduct. The concept of ethical to choose an action that could be unethical. A deci- standards applies to actions that are hoped for and sion-making model is presented that can help resolve expected by individuals. Actions may be considered ethical dilemmas in the healthcare field. This chap- legal but not ethical. There are many definitions of ter will discuss ethical theories, codes of healthcare ethics but, basically, ethics is concerned with what are conduct, informed consent, confidentiality, special right and wrong choices as perceived by society and populations, research ethics, ethics in public health, individuals. end-of-life decisions, genetic testing and profiling, The concept of ethics is tightly woven through- and biomedical ethics, which focuses on technology out the healthcare industry. It has been dated back use and health care.

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▸▸ less defined and less understood compared to tra- Chapter 13 ditional medical problems, interventions are less According to the World Health Organization, mental developed than in other areas of medicine. This wellness or mental health is an integral and essen- chapter will discuss the following topics: the history tial component of health. It is a state of well-being in of the U.S. mental healthcare system, a background which an individual can cope with normal stressors, of healthcare professionals, mental healthcare law, can work productively, and is able to make a contribu- insurance coverage for mental health, barriers to tion to his or her community. Mental health behavioral mental health care, the populations at risk for men- disorders can be caused by biological, psychological, tal disorders, the types of mental health disorders as and personality factors. By 2020, behavioral health classified by the American Psychiatric Association’s disorders will surpass all physiological diseases as a Diagnostic and Statistical Manual of Mental Disor- major cause of disability worldwide. Mental disor- ders (DSM), liability issues associated with mental ders are the leading cause of disability in the United health care, an analysis of the mental healthcare States. Mental illnesses can impact individuals of any system, and guidelines and recommendations to age, race, religion, or income. According to the Sub- improve U.S. mental health care. A section on family stance Abuse and Mental Health Services Administra- and caregivers is also included. tion’s 2014 National Survey, an estimated 43.6 million (18.1%) Americans age 18 or older experienced some form of mental illness. In 2014, 20.2 million adults ▸▸ Chapter 14 (8.4%) had a substance use disorder. Anxiety disor- ders are the most common type of mental disorders, The U.S. healthcare system has long been recognized followed by depressive disorders. for providing state-of-the-art health care. It has also Different mental disorders are more likely to been recognized as the most expensive healthcare begin and occur at different stages in life and are thus system in the world and the price tag is expected to more prevalent in certain age groups. Lifetime anxi- increase. Despite offering two large public pr­ ograms— ety disorders generally have the earliest age of first Medicare and Medicaid for elderly, indigent, or dis- onset, most commonly around age 6. Although men- abled individuals—current statistics indicate that tal health is a disease that requires medical care, its millions of individuals are uninsured, although the characteristics set it apart from traditional medical Affordable Care Act’s individual mandate to pur- care. U.S. General David Satcher released a chase health insurance coverage has reduced those landmark report in 1999 on mental health and illness, numbers. Mental Health: A Report of the Surgeon General. The The U.S. healthcare system continues to evolve. Surgeon General’s report on mental health defines Technology will continue to have a huge impact on mental disorders as conditions that alter thinking health care. Consumers have more information to processes, moods, or behavior and result in dysfunc- make healthcare decisions because of information tion or stress. The condition can be psychological or technology. Healthcare providers have more oppor- biological in nature. The most common conditions tunities to utilize technology such as robotic , include phobias, which are excessive fear of objects e-prescribing, and clinical decision support systems or activities; substance abuse; and affective disorders, that will assist them with diagnoses. The Green House which are emotional states such as depression. Severe Project is an exciting initiative that may transform mental illness includes schizophrenia, major depres- how long-term care will be implemented. As our pop- sion, and psychosis. Obsessive-compulsive disorders ulation becomes grayer, more citizens will want to (OCD), intellectual disabilities, Alzheimer’s disease, live as independently as possible for a longer period and dementia are also considered mentally disabling of time, and the Green House Project is an excellent conditions. template for achieving this goal. All of these initiatives According to the report, mental health ranks are exciting for the healthcare consumer. The imple- second to heart disease as a limitation on health mentation of an EHR, which will enable providers and productivity. People who have mental disorders to share information about a patient’s health history, often exhibit feelings of anxiety or may have hallu- will provide the consumer with the opportunity to cinations or feelings of sadness or fear that can limit obtain more cost-effective and efficient health care. normal functioning in their daily life. Because the The Veterans Administration hospitals use the EHR causes or etiologies of mental health disorders are system. Duke University Health System also uses an

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EHR system in North Carolina. There are hospitals, healthcare access to their citizens. The main difference physician practices, and other healthcare organiza- between these three countries and the United States is tions that utilize EHR systems across the country. in the willingness of individuals to pay more so all citi- Even though implementing the system nationally will zens can receive health care. That collectivistic attitude be extremely expensive—costs have been estimated in does not prevail in the United States and would be the billions—it will eventually be a cost-saving mea- difficult to institute. However, the mandates for both sure for the United States. The Affordable Care Act business and individuals to purchase health insurance has provided many incentives to improve the quality coverage through the establishment of state health of and access to the U.S. healthcare system. The Cen- insurance marketplaces should improve the overall ter for Medicaid and Medicare Innovation has over 40 health of the United States. demonstration projects that focus on different types of This chapter will compare the U.S. healthcare sys- financing models that are based on the performance tem and the healthcare systems of other countries and of healthcare providers. discuss whether universal healthcare coverage should The discussion concerning different countries’ be implemented in the United States. This chapter will healthcare systems indicate that all countries have also discuss trends that may positively impact the U.S. problems with their healthcare systems. Establishing healthcare system, including the increased use of tech- a universal healthcare system in the United States nology in prescribing medicine and providing health may not be the answer. There are aspects of each of care, complementary and use, these programs that could be integrated into the U.S. new nursing home models, accountable care organi- system. There are a surprising number of similarities. zations, and the universal-healthcare-coverage pro- The major differences are in the area of the control grams in Massachusetts and San Francisco, California. the government places on pharmaceutical prices and The Affordable Care Act (ACA) will also be discussed health insurers. Some governments limit drug manu- because of its major impact on the U.S. healthcare facturers’ and insurers’ profitability in order to increase system.

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